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IndiGo Q3 Profits Drop 77% Due To Labour Costs, December Crisis
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IndiGo posted a 77.5 percent profit drop in Q3 FY26 due to new labour laws and December disruptions, but revenue rose 6 percent.
Looking ahead, the airline expects capacity (ASK) to grow around 10 percent in Q4 FY26.
IndiGo Share Price: InterGlobe Aviation, which operates IndiGo airline, reported a sharp drop in profits for the October–December quarter of FY26, largely due to one-time costs linked to new labour laws and a major operational breakdown in December.
The airline posted a consolidated net profit of Rs 549.8 crore in Q3 FY26, down 77.5 percent from Rs 2,448.8 crore recorded in the same quarter last year. Excluding exceptional items totalling Rs 1,546.5 crore, profit would have come in at Rs 2,096.3 crore, still reflecting a 14 percent year-on-year decline.
Revenue growth holds up despite disruption
Even as profits took a hit, IndiGo managed to grow its topline. Revenue from operations rose 6 percent YoY to Rs 23,471.9 crore, supported by higher capacity deployment. The airline continues to dominate India’s aviation market with close to two-thirds share.
During the quarter, capacity expanded 11.2 percent YoY, while passenger numbers increased 2.8 percent. However, operational stress showed up in performance metrics. The load factor slipped by 2.4 basis points to 84.6 percent, and yield declined 1.8 percent to Rs 5.33. Fuel cost per available seat kilometre (CASK) eased 2.8 percent to Rs 1.53, even as overall costs rose nearly 10 percent, with fuel expenses up 8 percent.
Labour codes trigger major one-time hit
A significant part of the earnings impact came from India’s newly implemented labour laws, which became effective on November 21. These rules mandate a standard definition of wages, including a requirement that basic pay account for at least 50 percent of total CTC, limiting the use of allowances to reduce statutory payouts.
As a result, IndiGo recorded a one-time exceptional loss of Rs 969.3 crore linked to the labour code transition.
December operational crisis adds pressure
The airline was also hit by severe disruption in early December, when large-scale flight cancellations and delays created chaos at major airports. The issue was driven mainly by crew shortages, especially pilots, following the rollout of revised Flight Duty Time Limitation (FDTL) norms, which require longer rest periods.
Industry estimates suggest the disruption affected over 3 lakh passengers. IndiGo booked a one-time loss of Rs 577.2 crore related to the crisis.
Regulator DGCA later imposed a Rs 22 crore penalty after the airline cancelled 2,507 flights and delayed 1,852 flights between December 3 and 5.
Operational metrics and outlook
For the quarter, IndiGo reported technical dispatch reliability of 99.9 percent. On-time performance at six major metros stood at 76.6 percent, while the cancellation rate was 1.03 percent.
Looking ahead, the airline expects capacity (ASK) to grow around 10 percent in Q4 FY26.
What the CEO said
Commenting on the quarter, IndiGo CEO Pieter Elbers acknowledged the operational challenges faced in December.
He said the airline regretted the inconvenience caused to passengers during the disruption period and thanked customers for their patience. Elbers also credited IndiGo employees for stabilising operations quickly and thanked government bodies and aviation authorities for their support.
Despite the setbacks, he noted that the airline served nearly 32 million passengers in the quarter and around 124 million passengers in calendar year 2025, adding that IndiGo’s long-term fundamentals remain strong, supported by fleet expansion and a growing domestic and international network.
January 22, 2026, 18:37 IST
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